Mexico

5 Chapter Corporation Law

    • Principle company form in Mexico.

       The General Law of Commercial Companies acknowledges the following species of commercial companies:

      I. General partnership;

      II Limited partnership;
      III. - LLCs;
      IV Corporation;
      V. Company limited by shares, and
      VI Cooperative Company
       
      ■ Corporation limited (Company limited) Sociedad Anónima
      According to the Mexican law of commercial companies, Corporation is the one that exists under a name and consists exclusively from partners whose liability is limited to the payment of shares. The name will be formed freely, but it will be different from any other society and the employed will always be followed by the words "Sociedad Anónima" or its abbreviation S.A.
      They have the character of limited liability capital they bring, but they have the alternative of having the doors open to anyone who wishes to acquire shares of the company. By this way, these companies may perform capital increases, within the rules regulating.[1]
       
      ■LLC
      Article 58 LLCs is that which is between partners who are only obliged to pay their contributions, without which the company's shares may be represented by negotiable securities to order or to bearer, since only be assignable in cases and with the requirements of this Act. Known in Spanish as “Sociedad de Responsabilidad Limitada” or “S. de R. L.”
       
      ■Capital Variable
      According to the law of commercial companies, Article 213. In societies with variable capital the capital increase will be subject to later contributions from partners or the admission of new members, and decrease of the capital by partial or total withdrawal of contributions, without further formalities those established by this chapter.
      214. The companies with variable capital governed by the provisions that apply to the kind of society in question, and those of the corporation on balances and liabilities of directors, except for the modifications set forth in this chapter.
      216. The security agreement of any society with variable capital shall contain, in addition to the provisions that apply to the nature of society, the conditions set for the increase and decrease of the share capital. In stock companies the social contract or the Extraordinary General Assembly fixed capital increases and the form and terms to be made in the relevant share issues. The issued and unsubscribed to interim certificates, if any, shall be kept in the hands of society to indulge as you carried your subscription.
      Article 217. In the corporation, the limited liability and joint stock at a minimum capital may not be less than that set in Articles 62 and 89. In general partnerships and limited partnerships will be indicated. The minimum capital shall not be less than one fifth of the initial capital.
       

      [1] Introducción a la Administración de Organizaciones», Segunda Edición, de De Zuani Rafael Elio, Editorial Maktub, 2003, Págs. 82 al 86.

    • Corporation Limited (Company limited) Sociedad Anónima

      ■Engine design (how to set up institution how to hold general meeting)

       

      Article 89. To proceed with the constitution of a corporation is required:
      I. Let there be at least two partners and that each of them subscribes an action at least;
      II That the social contract provides the minimum amount of capital and is fully subscribed;
      III It is displayed in cash, at least twenty percent of the value of each share payable in cash, and
      IV To be fully display the value of each share to be paid, in whole or in part with assets other than cash.
      Article 90. The corporation may be constituted by an appearance before a notary public, of the people who grant writing or appropriate policies or public subscription, in which case it will be governed by the provisions of Article 11 of the Law on Securities Market .
      Article 91. The incorporation or policy of the corporation shall, in addition to the information required by Article 6, as follows.:
      I. The exhibited part of the capital;
      II The number, nature and nominal value of the shares into which the capital is divided, except as provided in the second paragraph of section IV of Article 125;
      III The form and terms to be paid the unpaid portion of the shares;
      IV The share of profits granted to the founders;
      V. The appointment of one or more Commissioners;
      VI The powers of the General Assembly and the conditions for the validity of its deliberations and for the exercise of voting rights, as the laws can be changed by the will of the partners.
       
       
      ■Type of shares
      The shares are debt instruments that represent the participation of the partners in an aliquot of the share capital of the company, granting therefore corporate and economic rights in her order, and are also trading investment securities eminently speculative. The shares have two values, the nominal calculated by dividing the net capital by the number of shares and the real estimated its market value or price obtained in relation to supply and market demand and certainly by the value of corporate assets.
       
      ·         Treasury shares: one part of the capital.
      ·         Callable shares: those that are not fully paid by the shareholder.
      ·         Bonus shares: those that were fully paid.
      ·         Ordinary shares: entitled to vote in both ordinary and extraordinary meetings in addition to the right to receive income that has the society.
      ·         Limited voting preference shares: These shareholders are only entitled to vote in certain circumstances (special meetings).
      ·         Benefit shares: are entitled to a share of profits.
      ·         Preference shares: those with preference or advantage in terms of profit sharing or some other benefit.
       
      ■Share issues
      To corporations it is prohibited from acquiring its own shares, except for judicial adjudication in payment of credits society.
       
      ■Tresury stock
      Article 134 of the LGSM prohibits anonymous societies acquire its own shares, except for judicial adjudication in payment of credit society, that is, when the company was awarded shares for non-payment of capital calls, in which case you should sell the stock in three months or, failing that, shall reduce its share capital. While the company owns shares issued by it under this paragraph, then, these shares cannot be represented at shareholders' meetings.
       
      ■ Amount of issue of share
      Article 112. The shares shall be of equal value and confer equal rights.
       
      ■ Method of decision of dividend
      Shares in the capital of a corporation shall be represented by registered securities that serve to demonstrate and convey the quality and shareholder rights are divided and governed by the provisions relating to literal values, which is compatible with your nature and is not modified by this Act.
      The shares shall be of equal value and confer equal rights, however, in the social contract it may provide that the capital is divided into several classes of shares with special rights for each class.
      Every action will have only one vote; but in the social contract it can be agreed that part of the shares have voting rights only in extraordinary meetings.
      No dividends may be allocated to ordinary shares without first paying for limiting voting a dividend of five percent. When no dividends or below that are five percent in any fiscal year, it will cover in the following years with the specified priority.
      By becoming the liquidation of the company, the limited voting shares are redeemed before ordinary.
      In the social contract it can be agreed that the limited voting shares are set a higher dividend than ordinary shares.
       
      ■Decided agent:
      When opening a new company is important to hire a lawyer, an accountant, and labor or human resources agent.
       
      Visa Information:
      VISAS
      Types of visas at the Consular Section
      1. Visitor Visa without permission to perform remunerated activities
      2. Temporary Resident Visa
      a) Permission to paid employment.
      b) No permission to paid employment.
      c) Household.
      3. Temporary Resident Visa student.
      4. Permanent residence visa.
       
      A) If the applicant requests by Mexican family ties.
      B) If the applicant is a pensioner or retiree.
      All visa procedures have to be for no more than 180 days and have a maximum of 10 working days to be resolved. All procedures are performed by appointment and each procedure has different requirements. The requirements for a temporary visa with permission to remunerated activities are:
      Requirements:
      I. passport or identity and travel document that is valid under international law and force, original and copy;
      II. A photograph with the visible face without glasses, color, passport size, which measures should be at least 32.0 mm x 26 mm and a maximum of 39.0 x 31.0 mm with white background and foreground;
      III. Original and copy of the document proving their legal status if the foreign person is not a national the country where the visa request, and
      IV. Present Unique number Step (NUT) issued by the National Immigration Institute.
       
      ■Capital
      The capital contributions made by shareholders who may be in money or goods, which are called actions.
       
      ■General meeting
      Article 178. The General Assembly of Shareholders is the supreme body of the Company; may agree and ratify all acts and operations of this and its resolutions will be fulfilled by the person designated by itself, or if no designation by the Administrator or by the Board of Directors.
       
      ●Type of general meeting
      Here we distinguish the different types of general meeting:
      ·         Constituent assembly: held once in the life of society.
      ·         Ordinary Assembly: those who meet at least once a year to discuss and approve the appropriate financial report that is submitted to it by the administration; in addition to the appointment and remuneration of the organs of administration and monitoring, which should also occupy (Article 181).
      ·         Extraordinary Assembly: is performed when, following a call, you should treat it any other aspect of the running of the social being and that justifies it, but especially concerning the modification of the bylaws, or make discussions regarding various issues of society that are not reserved to the ordinary general meeting (Article 182).
      ·         Special assembly: those in which certain groups of minority shareholders participating character. It is intended for cases where it requires the consent of holders of a shareholding different from the common, as in the case of shares with limited voting or working (Article 175).
      ·          
      ●Date
      Article 181. The Ordinary Assembly shall meet at least once a year within four months following the close of the fiscal year.
       
      ●Place
      Article 179. The General Shareholders' Meetings are ordinary and extraordinary. Both will meet at the registered office, without this requirement will be void, unless unforeseen circumstances.
       
      ● Convenor
      The power to convene the shareholders to hold an assembly corresponds to the administrator or administrators.
      Shareholders have no right to call a meeting. Shareholders are only entitled to ask the manager or board of directors or commissioners to conduct the respective call, and in some cases, the request will be made to the courts (Article 184. LGSM)
       
      ●Notice for general meeting
      The notice must be published in the relevant official newspaper and major newspapers, with an advance of fifteen days preceding the date on which the meeting is held (Article 186, LGSM)
       
      ●Chairman for general meeting
      Article 178. all acts and operations of the general assembly and its resolutions will be fulfilled by the person designated by itself, or if no designation by the Administrator or by the Board of Directors.
      Article 148. The Board of Directors may appoint from among its members a delegate for the implementation of concrete actions. In the absence of special designation, the President shall represent the Council.
       
      ●Board of directors
      Article 143. When administrators are two or more, constitute the Board of Directors. For the Board of Directors must attend work legally, at least half of its members, and its resolutions will be valid when they are made by a majority of those present. In case of a tie, the Chairman will decide to vote.
       
      ●Requirement of director
      Art 151: They may not be Administrators and Managers, which according to law are disqualified from holding trade.
       
      ●Notice  
      The discussions and resolutions of the Council will take a minute book which shall be signed by the president and secretary.
       
       
      ● Place where to hold a meeting depends on situation
      (meetings are mostly in the office)
       
      ●Range of Special authority of board of director  
      The administrative body enjoys a wide autonomy in regard to the activity of the legal entity and therefore also, managers are accountable to the company and third parties the performance of the duties of the office or violation of rules the running-act as representatives of society.
       
      ●Special authority in board of director
      The board enjoys autonomy from the shareholders and does not require specific instructions to bring within its competence acts, that the activity of managers is not only an instrument for the implementation of the agreements the assembly, but those are entitled to form and declare the social will in the circle of its powers, that is, in the carrying out of acts and concrete and specific legal business for the management of the company and the representation of the legal person.
       
      ●Structure of board of director
       The structure of the board of directors of a company is one of the most important indications of the statutes.
      In general, legal systems allow each company to organize its administration as it considers more convenient, does not impose a rigid structure and predetermines the administrative body and empowers the statutes to opt between several alternative ways.
      The forms are usually permitted:
      Sole administrator
      Several administrators solidarity
      Two sets administrators
      A Board, also known as Directory in some countries, or Board.
      Socioeconomic Manager
       
      ●Election of board of director in minority shareholder
      ·         Minority rights: The right held by shareholders representing 25% of the shares entitled to vote, or a fraction of the subscribed capital.
       
      ·         Request to convene assembly. (Art. 141)
       
      ·         It allows to deduce liability action against the directors. (Art. 175)
       
      ·         Establishes the right to appoint auditor or commissioner for taxation. (Art. 186)
       
       
      ●CEO only in Mexico: 
      The companies in Japan can have many and different board of directors, in Mexico there can be only one board of directors.
       
      ●Auditor
      The financial statements of the spun-off company, covering at least the operations performed during the last fiscal year, duly audited by an external auditor.
       
      ●Election
      The election of board members is done through voting. To this end, the actions voluntarily pooled, up to a total of share capital equal to or greater than the result of dividing the latter by the number of members of the Board shall be entitled to designate those who, exceeding whole fractions, are deducted of the corresponding proportion. In the event that use of this power is exercised, the shares pooled not intervene in the vote of the remaining members of the Council.
       
      ●Requirement
      To be appointed administrator need not be a shareholder of the Company, unless otherwise provided in the bylaws. Administrators cannot be named:
       
      - Children and disabled.
      - The sentences to which laws add the disqualification from public office.
      - Those who they have been convicted of serious breaches of laws or social provisions.
      - Those who, by virtue of his office, cannot engage in commerce.
      - Officials at the service of the Administration responsible functions that relate to the activities of the company in question.
       
      ●Authority and Duty
      Article 149. The Administrator or the Board of Directors and the Managers may, within their respective powers, confer powers on behalf of the company, which may be revoked at any time.
       
      ●Term and Office
      Administrators are appointed for the time period specified in the bylaws. That period may not exceed five years and may be reappointed one or more times for periods of equal length.
       
      ●Dismissal
      Administrators in the execution or the fulfillment of their duties must always remember that their activity has to be carried out taking into account the social interest.
       
      ●Incentive
      The Authority is comprised of the commissioner or commissioners and its function is to watch over actions of managers. The position of the administration creates incentives to perform at the expense of partners, for this reason, the stewards monitor the performance of managers. (Article 166 LGSM)
       
      ●Reward
      Incentives depend on each institution and address financial and non-financial direct and indirect compensation, seeking to motivate workers to continue providing greater efficiency to the company. The incentives are those payments made by the organization to its workers’ salaries, bonuses and benefits, opportunities for progress and stability of office, proposing incentives encourage or induce workers to observe a certain behavior that generally is aimed directly or indirectly achieve the objectives of more quality, quantity and with lower costs, these stimuli are offered in order to increase production and improve yields rewards a higher required result.
      The performance involves compulsory for employers and employees so they cannot be waived or changed the minimum mark to be to cover the work.
      Regulations and benefits are outlined in the federal labor law which stipulates its monitoring by the labor authorities. The facilities and services provided today's competitive business There are a variety and diversification benefits provided by organizations other than those established by the laws, by which these benefits are subject to the rules and policies of each organization. Some of the most common are:
      The facilities and services provided today's competitive business
      There are a variety and diversification benefits provided by organizations other than those established by the laws, by which these benefits are subject to the rules and policies of each organization. Some of the most common are:
      -Personal loans.
      -Salary advances.
      -Advances annual bonus.
      -Savings account.
      -Transportation assistance.
      -Compensating for insufficient salary.
      -Payment of scholarships.
      -Tuition payments for children of employees.
      -Paid vacation days in addition to those specified by the legislation.
      -Payments for voluntary retirement.
      -Payments for several reasons: contests, tips, antique, and so on.
      -Additional to that indicated by the annual bonus law.
      -Pensions.
      -Life insurance.
      -Hospital insurance and medical expenses.
      -Payment of full salary if no occupational disease disability.
      -Salary compensation for change of location. Indirect financial benefits are benefits provided by the organization to work in various forms, funding them either wholly or in part; in any case the worker receives cash, and are switchable by its equivalent in monetary units:
      -Enjoy holidays in special cases.
      -Adjusting working days ("Holidays").
      -Lunch service.
      -Various competitions: health and safety, punctuality, etc.
      -Transport service.
      -Personal counseling.
      -Various cultural activities: concerts, museum visits, and so on.
      -Various social activities: sporting events, movies, clubs, lodges, parties and so on.
      -Schedule facilities for study.
      -Purchase of goods through the company.
      -Obtain shares of the company.
      -Full payment of social security contributions.
      -Leave with pay (eg: by marriage, birth of a child, family death, etc.).
      -Car insurance.
      -Vehicle availability of the organization.
       

    • LLC

      ■Engine design (share stock)

      According to the General Law of Commercial Companies, any limited company won’t have more than fifty partners. The capital will be the one established in the social contract; it shall be divided into shares that can be of value and uneven category, but in any case will be a multiple of weight. The constitution of limited liability companies or increasing its share capital may not be conducted by public subscription. The formation of the company's capital must be fully subscribed and displayed, so least fifty percent of the value of each social part.

       
      ■Employee
      In Mexico the Law for the Development of the Competitiveness of Micro, Small and Medium Enterprises aims to promote national economic development by promoting the creation of micro, small and medium enterprises and support for its viability, productivity, competitiveness and sustainability and increase its market shares in a context of increasing production chains that generate greater domestic value added.
      That in agreement with the Secretariat of Finance and Public Credit it is deemed necessary to establish a stratification based on the number of workers taking into account a criterion of annual sales, in order to avoid discrimination against intensive companies and labor that companies with high sales significantly participate in programs designed to micro, small and medium enterprises.
       
      Size
      Industry
      Range of number of employees
      Range of annual sales amount (mp)
      Micro
      all
      To 10
      To 4$
      Small
      Commerce
      From 11 to 30
      From $4.01 to
      $100
       
       
      Industry and Service
      From 11 to 50
      From $4.01 to
      $100
       
      Medium
      Commerce
      From 31 to 100
      From $100.01 to
      $250
       
       
      Service
      From 51 to 100
      From $100.01 to
      $250
       
       
      Industry
      From 51 to 250
      From $100.01 to
      $250
       
       
       
      ■ Equity interest
      Each partner will have no more than a social part. When a member makes a new contribution or acquiring all or a fraction of part of a co-partner, will be increased by the corresponding amount the value of the social part, unless such part having various rights, for then the individuality of the parties will be preserved social.
       
      ■ Corporate officer/Auditor
      The administration of limited liability companies will be responsible for one or more managers who may be partners or strangers to society, appointed or temporarily indefinitely. Unless otherwise agreed, the company has the right to revoke at any time your administrators.
       
      ■ Employees general assembly
      The assembly of members is the supreme organ of society. Its decisions are taken by majority vote of the shareholders representing at least half of the share capital, unless the social contract requires a greater majority. Unless otherwise provided, whichever is not obtained at the first meeting, members will be summoned for the second time, taking the
      decisions by majority vote, whatever the portion of capital represented.
      Article 78. The assemblies have the following powers:
      I. Discuss, approve, modify or disapprove the balance sheet for the financial year closed and to take these reasons, prompt action.
      II Proceed to profit sharing.
      III appoint and remove managers.
      IV Designate, where appropriate, the Supervisory Board.
      V. To resolve on the division and amortization of the company's shares.
      VI. Require, if any, additional contributions and ancillary services. Try VII against corporate bodies or against the partners, the shares corresponding to
      to demand damages.
      VIII Modify the social contract.
      Consent IX in transfers of partnership interests and the admission of new members.
      X. Decide on the increases and reductions in capital.
      XI Decide on the dissolution of the company, and
      XII. - which they are entitled under the Act or the social contract
       

    • Liquidation of company

      ■Reason of dissolution and liquidation

      Article 229. The companies are dissolved:

       On expiry of the term established in the social contract;
      II By inability to continue performing the main purpose of the company or get it accomplished;
      III By agreement of the partners taken in accordance with the social contract and the law;
      IV Because the number of shareholders falls below the minimum established by this Law, or because the parties of interest together in one person;
      V. For the loss of two thirds of the share capital.
       
      ■Process of dissolution and liquidation
      Article 232. In the case of Section I of Article 229, the dissolution of the company will be held by the mere passage of time established for its duration. In other cases, proven by society the existence of grounds for dissolution, it shall be entered in the Public Registry of Commerce.
      If the registration is not made despite the existence of the cause of dissolution, any interested person may appear before the judicial authorities in summary proceedings, so that orders registration of dissolution.
      Article 234. Dissolved society shall be liquidated.
       
      ■Liquidation officer
      Article 235. The liquidation will be conducted by one or more liquidators, who are legal representatives of the company and liable for acts performed exceeds the limits of their duties.
      Article 242. Unless the agreement of the partners or the provisions of the social contract, the liquidators shall have the following powers:
      I. Conclude corporate transactions which have been pending at the time of dissolution;
      Charge II which is due to society and what she should pay;
      III Sale goods society;
      IV. - Settle each partner having their social;
      V. Practicing the final balance of the liquidation, to be submitted to the discussion and approval of the partners, in the manner appropriate to the nature of society. The bottom line, once approved, shall be deposited in the Public Registry of Commerce;
      VI Get from the Public Registry of Commerce cancellation of the registration of the social contract, once the liquidation.
       
      ■Sale of business by business transfer
      -Apply business valuation methods to obtain the estimated value of your shares or the company in general. These methods will give you a window for negotiations with your counterpart. -Determine a sales strategy, from the estimated value of your actions because it might work advisable to make a partial sale. Analyze the best option, especially considering the commercial potential of the company. -Make a legal process seriously and completely for the sale or transfer of shares, as this will give certainty to assume future commitments and give clarity about the legal position regarding the company. -Take advice from a specialized commercial processes lawyer or or corporate law attorney. Of course, it is important that he explains to you what is going to be his support, costs, times and results obtained for their services.
       
      ■Close of representative and branch
      To close a representative office or branch must first verify that do not have debts to local and federal authorities concerned, then it must terminate registration with the SAT RFC, from that legal procedures are performed and also due to present the relevant annual returns.